This ppt gives an insight into the three major types of Expansion through cooperation strategies with corporate examples.

1. PREPARED BY:
SALONI SRIVASTAVA
MBA(FC) III SEM.
IMS, LUCKNOW UNIVERSITY.
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2. The corporate strategy of expansion is followed when an
organization aims at high growth by substantially
broadening the scope of one or more of its business in
terms of their respective customer groups, customer
functions and alternative technologies- singly or jointly- in
order to improve its overall performance.
Also known as Growth or Intensification strategies.
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3. IMPORTANCE
OF
EXPANSION
ECONOMIES
OF SCALE
CUSTOMER
BASE
BRAND
RECOGNITION
INCREASED
INCOME
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4. Corporate strategies that take into account the possibility of
mutual cooperation with competitors, at the same time
competing with them so that the market potential could
expand.
Cooperation could take place in various ways:
1. Mergers and acquisitions
2. Joint ventures
3. Strategic alliances
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5. • Mergers and acquisitions, involves the process of combining two
companies into one. The goal of combining two or more businesses is
to try and achieve synergy.
• Mergers occur when two companies join forces. The terms of the
merger are often fairly friendly and mutually agreed to and the two
companies become equal partners in the new venture.
• Acquisitions occur when one company buys another company and
folds it into its operations. Sometimes the purchase is friendly and
sometimes it is hostile, depending on whether the company being
acquired believes it is better off as an operating unit of a larger venture.
• The end result of both processes is the same, but the relationship
between the two companies differs based on whether a merger or
acquisition occurred.
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6. Horizontal
Merger
Vertical
Merger
Concentric
Mergers
Conglomerate
Mergers
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7. MERGER
Merging of
two
organization
into one.
It is the
mutual
decision
Dilution of
ownership
occurs in
merger.
Through
merger
shareholders
can increase
their net
worth.
ACQUISITION
Buying one
organization
by another
It can be
hostile
takeover.
The acquirer
does not
experience
the dilution of
ownership.
Buyers
cannot raise
their enough
capital.
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8. 8
Ola and
FoodPanda
Axis Bank and
Freecharge
Dena Bank, Vijaya
Bank and Bank of
Baroda.
Airtel and Telenor.
Examples of
Merger and
Acquisition

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MERGERS
ABSORPTI
ON
CONSOLIDATIO
N
JOINT
VENTURE
JOINT VENTURE IS A SPECIAL CASE OF CONSOLIDATION
WHERE TWO OR MORE COMPANIES FORM A TEMPORARY
PARTNERSHIP FOR A SPECIFIED PURPOSE.

10. • An effective strategy when development costs have to be
shared, risk spread out and expertise combined to make
effective use of resources.
• Triggers for a joint venture: technology, geography,
regulation, sharing of risk and capital and intellectual
exchange.
• Eliminating, controlling or reducing competition may be of
strategic importance and can be brought about through
joint ventures.
• Environmental threats within the country or opportunities
abroad may cause firms to undertake joint venture.
• All that's needed to form a joint venture is a written
agreement (a contract) between the parties. The
agreement should spell out the details of the purpose,
how the two (or more) parties share in profits and losses,
and how the parties share in making decisions about the
joint venture. 10

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Between two firms
in one industry
Between two firms
across different
industries
Between an Indian
firm and a foreign
company in India.
Between an Indian
firm and a foreign
company in that
foreign country
Between an Indian
firm and a foreign
company in a third
country.

12. 1. Tata – Gülermak JV with a Rs 1190.52 crore contract
to build Lucknow Metro’s 3.44 km underground section.
2. Starbucks and Tata Global Beverages ltd.
3. Bharti AXA General Insurance Co Ltd is a JV between
India’s leading business group Bharti Enterprises and
insurance major from France, AXA.
4. Mahindra-Renault, founded in 2007 brings together
India’s largest automobile manufacturer Mahindra &
Mahindra and world renowned vehicle maker, Renault
SA of France.
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Examples of joint venture:

13. • Agreement for cooperation among two or more independent
firms to work together toward common objectives. Unlike in a
joint venture, firms in a strategic alliance do not form a new
entity to further their aims but collaborate while remaining
apart and distinct
• The primary reason why firms enter into strategic alliance is to
enhance their organizational capabilities and thereby gain
competitive and strategic advantage.
• When the firms find that it is not feasible to either create
resources internally or to acquire them, they rely on strategic
alliances to create a network of beneficial relationships.
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TYPESOFSTRATEGIC
ALLIANCE
PROCOMPETITIVE
ALLIANCE
NONCOMPETITIVE
ALLIANCE
COMPETITIVE
ALLIANCE
PRECOMPETITIVE
ALLIANCE

16. 1. The procompetitive alliance is characterized by low interaction
and low conflict. Such alliances offer the benefits of vertical
integration, i.e. a relationship between the manufacturer and its
suppliers or distributors, without the firms actually investing the
resources in the manufacturing firm or distributing the semi-finished
or finished goods.
2. Non-competitive Alliances are characterized by high interaction
and low conflict. The non-competitive alliances are formed
between the companies that operate in the same industry but do
not consider each other as rivals.
3. Competitive Alliances are characterized by high interaction and
high conflict. Here, two competing firms that perceive each other
as rivals come together to form an alliance and. Therefore, the
intense interaction between the two is necessary. Such alliances
could be intra- or inter-industry.
4. The pre-competitive alliance is characterized by low interaction
and high conflict. Such partnership brings two firms from different,
most often unrelated industries to work towards a specific activity,
such as new product development, new technology development,
or creating awareness among the potential customers about the
use of new product or idea.
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